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July 18, 2008

Dutch Court Upholds Flight Tax

by Sam Savage

Dutch court upholds flight tax

BRUSSELS, June 17 (Xinhua) -- The Dutch aviation industry has failed to force the Dutch government to remove the tax on all flights departing from Dutch airports, with the Dutch appeal court ruling in favor of the government on Thursday.

The high court in The Hague ruled that the newly introduced flight tax does not break European law or international air treaties, upholding a lower court decision, Dutch media reported.

The case was brought by the Maastricht airport, budget airline Ryanair and the airline lobby group BARIN. They complain that the new tax is scaring off passengers and adding a huge burden on the aviation industry.

From July 1, people leaving from Dutch airports have to pay an extra 11.25 euros on a short-haul flight and 45 euros on a long- haul flight. The tax is aimed at encouraging energy savings and less greenhouse gas emissions.

KLM Director Peter Hartman complained that the flight tax will cost the company between 500,000 and 1 million passengers this year, Dutch paper De Volkskrant reported Thursday.

The number of ticket sales are going down "shockingly" quickly, Hartman told the paper. "Cost-conscious customers are looking for alternatives abroad. We have warned about this and now it is happening," he said.

The Dutch cabinet has "severely underestimated" the effect of the tax, which will damage KLM, the Amsterdam Schiphol airport and the Netherlands as a whole, Hartman said.

Earlier this month, Schiphol airport said it will cease to expand this year because higher charges are scaring off customers. The airport said it had lost hundreds of thousands of customers to airports in neighboring Belgium and Germany this year.

The flight tax is one of the measures the Dutch government had promised to introduce to encourage energy savings and to combat air pollution. The government aims to achieve energy savings of 2 percent a year and to cut emissions of greenhouse gases by 30 percent by 2020 from 1990 levels.